China’s business confidence index drops to 41.7 %: poll
23 Dec 2011
China's business confidence index fell in the fourth quarter, the second consecutive drop, amid growing concern over rising costs, and a slowdown in the world's second-largest economy.
The business confidence index was down 6 percentage points more than the third quarter to 41.7 per cent, the People's Bank of China, the central bank, said in a statement.
A reading above 50 indicates optimism while anything below it indicates pessimism.
Of the 5,000 companies surveyed, 24.8 per cent believe that the economy's temperature is "relatively cool", and the percentage believing a positive growth has dropped from 74.3 per cent in the first quarter to 67.1 per cent now, according to the central bank.
It quoted, Fang Qi, general manager of Ningbo Shentong Electrical Co Ltd, who said the company's profit margin was likely to drop by more than 10 per cent this year due to falling sales, rising labour costs and dollar depreciation.
"We are now developing new products to attract customers in emerging markets as demand from Europe and the US continues to fall," Fang said. "But the rising cost of labour and raw materials remains a big challenge for us next year."
Another business man Zhang Beilei, the owner of Wenzhou Gaotian Shoe Co Ltd, said in the survey, "We're not very positive about the current shoe industry. It has been shrinking a lot due to lower demand from abroad and higher costs at home."
